Cote d'Ivoire Infrastructure Report Q1 2013

Côte d’Ivoire’s construction industry is forecast to post strong growth in 2012, driven by a renewed focus by government on construction projects. Greater political and social stability have been key in providing an environment where growth can take place, with 2012 set to see year-on-year (y-o-y)growth of 13% and construction industry value of US$1bn.

The key factors driving our forecasts this quarter are:

- We estimate that spending on fixed capital formation surged by 40.0% in 2012 as the government began its attempts to repair damaged infrastructure and private investment returned to the country. In 2013, growth will still be high (we forecast 10.0% real expansion) but will be slower than it was in 2012.

- Socoprim, a consortium led by Bouygues Travaux Publics, signed finance agreements for the design, construction, maintenance and operation of a EUR232mn (US$292.2mn) highway in Côte d'Ivoire. The project entails the construction of a third Abidjan Bridge, dubbed Henri Konan Bedié Bridge, connecting Riviera district with Marcory district and comprising two threelane carriageways. The consortium scheduled to start
work on the 6.4km highway in September 2012, with completion expected in 25 months. French shipping company CMA-CGM placed a bid of between EUR200mn (US$246.6mn) and EUR250mn (US$308.2mn) for a container terminal at the port of Abidjan in Côte d'Ivoire. The country's government intends to triple the capacity of the port to 2.3mn units by 2016. CMA-CGM Director General Rodolphe Saade said that the company intends to become a market leader in Africa.

- Côte d'Ivoire's government will construct a 275 megawatt (MW) hydropower station in the Soubré department of Bas-Sassandra region. The dam is scheduled to become operational by 2015-2016 and is part of a strategy to boost the country's power generation capacity by 150MW per annum.

- Parties have reached financial closure on Henry Konan Bedie Toll Bridge Project in Abidjan(‘Abidjan’s Third Bridge’). The 1.9 km long bridge connects the towns of Riviera and Marcory.

It was funded by an international group consisting of the African Finance Corporation, AfDB,Ecowas Bank for Investment and Development, West African Development Bank, and the Dutch Development Bank, Banque Marocaine pour le Commerce Extérieur, the Pan-African Infrastructure Development Fund, Bouygues, and the Ivorian Government. The project is part of the country’s reconstruction drive and has been contracted under the PPP model in a buildoperate-transfer concession granted to Socoprim.

Over our 10-year forecast period, the primary political goals will be rebuilding vital infrastructure affected by the civil war, reducing endemic poverty, addressing identity politics and unifying administration of the country. The risk of rebellions and coup attempts will remain high for the foreseeable future.

Over a year after the arrest of former president, Laurent Gbagbo, we see many reasons to be positive about the country's political development. While the situation is still fragile, we expect a gradual return to political stability.

Recently, a leaked UN report claims that activists loyal to ex-President Laurent Gbagbo have hired mercenaries in Liberia and met with Islamist extremists in Mali in an attempt to overthrow the Ivoirian government. Although we believes that the opposition lacks the capacity to follow through with its plans, we note that the sentencing of prominent Gbagbo loyalists will ratchet up tensions and increase the likelihood of small scale violence over the medium term.
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